Protecting IP Licenses and Jointly Owned IP in the Age of COVID-19: Insolvency and Force Majeure Events under Japanese Law

This article provides an overview and discussion of a multitude of issues that are relevant for IP licensing under Japanese law. The authors recap the results of the legislative process that predominantly addressed the IP licensee’s position in the case of a licensor’s insolvency, including the 2020 amendment to the Japanese Copyright Act, and examine whether a comprehensive reform of IP licensing regulations in Japan would be preferable to also offering better protection to trademarks, trade secrets and data licensees. Given that Japanese companies often agree on jointly owning IP generated in the process of software development and other co-development projects, we analyze the risks of joint ownership compared to non-exclusive licenses. To further illustrate such risks that may be even more significant in cross-border constellations, we conduct a comparative study on the actions that a party commissioning the development of new software can take without obtaining the software developer’s consent under Japanese, US and German patent and copyright law. Furthermore, we examine certain unresolved issues that may arise in the case of a party’s insolvency or the impact of force majeure events, and provide suggestions on how to address these when drafting and negotiating IP license agreements.